Key keywords: Turkish Central Bank (TCMB), US Treasury bonds historical divestment, TCMB foreign reserve adjustment, emerging market de-dollarization, Türkiye foreign exchange risk management, global US sovereign debt outflows, TCMB asset allocation shift, cross-border reserve diversification According to the latest official monthly reserve asset report released by the Central Bank of the Republic of Türkiye (TCMB) on July 18, 2024, the bank has sold nearly 100% of its US Treasury bond holdings, marking the largest single divestment of US sovereign assets in the institution’s history. Data shows that TCMB’s US Treasury holdings dropped from $3.78 billion in the second quarter of 2023 to just $1.9 million at the end of Q2 2024, a 99.95% reduction in the span of 12 months. TCMB officials stated in an accompanying public briefing that the sell-off is part of the bank’s long-planned reserve optimization strategy, designed to reduce exposure to single-currency sovereign assets, lower volatility of the national reserve portfolio, and better mitigate external financial shocks. The bank noted that it has redirected the proceeds from the US Treasury sell-off primarily to physical gold holdings, euro-denominated sovereign bonds from European Union member states, and local currency bonds of Türkiye’s major trade partners in the Middle East and Central Asia. As of the end of Q2 2024, TCMB’s gold reserves reached 612 tons, a 28% year-on-year increase, making Türkiye the 13th largest official gold holder in the world. Market analysts point out that TCMB’s historic move is part of a broader global trend of central banks reducing their reliance on US dollar-denominated assets. Data from the US Treasury Department shows that global central banks sold a combined $127 billion worth of US Treasury bonds in the first five months of 2024 alone, with 27 emerging market economies cutting their holdings by more than 30% over the past two years. Geopolitical risks including the US government’s history of imposing financial sanctions on sovereign entities, combined with extreme price volatility in US Treasury markets driven by the Federal Reserve’s aggressive interest rate hikes between 2022 and 2023, are the two core factors driving widespread divestment. While TCMB’s total US Treasury holdings were relatively small compared to large holders such as Japan and China, market watchers warn that the symbolic weight of this full sell-off may prompt other small and mid-sized emerging markets to follow suit, putting additional long-term upward pressure on US Treasury yields at a time when the US government is expanding its debt issuance to cover widening fiscal deficits.